For Immediate Release
December 7, 2011
ESOP and Homeowners Bring Principal Reduction Campaign to Banks
Cleveland, OH – Tuesday ESOP, along with homeowners and neighborhood leaders launched a campaign urging FHFA Director Ed DeMarco, along with the CEO’s of the nation’s major banks and mortgage companies, to use principal reduction to save homes from foreclosure and bring an end to the housing crisis.
They delivered letters to bank branches across the Cleveland area asking bank CEOs to support their demand that DeMarco end his opposition to principal reduction.
“Ed DeMarco’s policies at FHFA have continued to hurt our community,” says homeowner Anita Gardner. “He is responsible for the vacant houses and crime in our neighborhood and it’s time that he is held responsible for his policies.”
“The federal government bailed out the banks but left homeowners high and dry,” said homeowner Marvetta Rutherford.
Nearly one in four homes across the nation is underwater, meaning homeowners owe more on their mortgage than the current market value of their home. Negative equity is a problem not only for borrowers facing foreclosure, but it continues to be a drag on the housing market and overall economy.
However principal reduction is rarely used because of Ed DeMarco, the Director of FHFA. The Federal Housing Finance Agency refuses to allow principal reduction for mortgages backed by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are the two largest sources of U.S. mortgage finance. Along with the Federal Housing Administration, they provide the funds for 90 percent of all new mortgages.
“Homeowners keep losing their homes, falling further and further behind with no hope of regaining the equity in their homes. Meanwhile Ed DeMarco refuses to allow Fannie Mae and Freddie Mac to use principal reduction,” says Mark Seifert, Executive Director of Empowering and Strengthening Ohio’s People.
Recently members of congress cited several reasons supporting principal reduction and requested that DeMarco justify his refusal to implement a program.
“If Ed DeMarco won’t listen to Congress, economists or homeowners who all say we need principal reduction,” says Seifert, ”then maybe he’ll listen to the people he really seems concerned about - the banks. We want bank executives to tell DeMarco to use principal reduction.”
Principal reduction will help homeowners, taxpayers and the overall economy. Now homeowners are demanding that Ed DeMarco do what is necessary to help end the housing crisis.